A Direction is the written decision by the Accountant of Court confirming who has been given the responsibility to administer the child’s funds and /or property until they reach the age of 16 years.

A Direction can be granted in favour of the Accountant of Court’s office or in favour of the parent/legal guardian. The Accountant of Court will attach conditions which must be followed by the person who has been given the authority to administer the child’s funds and/or property. 

A Direction may be varied by the Accountant of Court throughout the period until the child reaches the age of 16 years.

Section 9

Where an Executor or Trustee is due to transfer estate to child under the age of 16 years then;

• They must seek a Direction from the Accountant of Court when the value of that estate exceeds the sum of £20,000.
• They may seek a Direction when the value of the estate is worth more than £5,000 but less than £20,000.

Where a person other than an Executor or Trustee (e.g. a pension provider or a third party holding funds due to a child) is due to transfer estate to a child under the age of 16 years then;

• They may seek a Direction where the value is not less that £5,000.

Section 13

• By order of the Court in any proceedings where a sum of money becomes payable to or for the benefit of a child under the age of sixteen.

Where the property or funds due to be transferred to the child are the subject of a Trust Deed and the nominated Trustees are willing to act. The property or funds will be held in a Trust and are therefore subject to Trust laws.

The fund holder or their Solicitor should apply to the Accountant of Court in writing or via email.

The information to accompany an application

• The child’s full name, date of birth and current address.
• The full name and current address of the child’s parent or legal guardian.
• Confirmation of the child’s nationality and their habitual residence.

Where appropriate, it would be helpful for the applicant to clarify;    

• Whether the deceased died testate or intestate and provide a copy of the Will and Confirmation.
• The relationship between the deceased and the child.
• The relationship between the legal guardian and the child, and provide documentation to confirm that parental rights and responsibilities have been granted.
• Whether the estate due to the child is likely to consist of heritable or moveable and provide an estimate of the fund due.
• Whether an application has been made in terms of section 29 of the Family Law Act 2006.
• Whether the parent/legal guardian would like to be considered for the administration of the child’s funds and whether they have any proposals for the investment of the child’s funds.

On receipt of an application the Accountant of Court may:

(1) -  Ask the Court to appoint a Judicial Factor to administer the property or funds until the child reaches the age of sixteen. This type of appointment will only be sought in cases where the items of estate make the administration and management more complex, or in cases of conflict between interested parties.  The appointed Judicial Factor will usually be a qualified Solicitor or Chartered Accountant. 

(2)  -  Direct that the property or funds be transferred to the Accountant of Court for administration and management.

(3)  - Direct that the parent or guardian may administer and manage the property or funds under the supervision of the Accountant of Court.

In this instance, in order for the Accountant of Court to be satisfied of the parent or guardian’s suitability to administer, he/she is required to confirm in writing that they meet the criteria set by the Accountant of Court. A style form can be downloaded here.

The Accountant of Court may include in the Direction such conditions as she considers appropriate. The parent or guardian will be asked to sign a Draft Direction as confirmation of their agreement and adherence to the conditions.  The parent or guardian should confirm to the Accountant of Court that they are in receipt of the funds due to the child. 

Any decision on the type of investment will depend on the age of the child and the sum available for investment.

If the funds to be invested are relatively small, the Accountant of Court will deposit the funds in an interest bearing bank account. Otherwise, the funds will be invested in an investment portfolio to achieve capital growth, although it should be noted that these funds are not 'tied up' in the investment.

The Accountant of Court will usually retain a small cash balance in a 'working account'.

The Accountant of Court does not charge fees in relation to the administration of the child’s funds, however there will be management charges incurred through the investment portfolio.

The parent/guardian is required to seek independent financial advice and submit their proposals for approval, prior to implementation. If the funds to be invested are small, the parent/guardian may be allowed to retain them in an interest bearing bank or building society account.

It is important that the funds/investments are identified as belonging to the child and not the parent/guardian for:

1. Tax purposes
2. To avoid confusion in the event that the parent/guardian predeceases the child.
3. To avoid confusion when the child attains the age of 16 and wishes to access their investment, or give instruction as to the on-going management of the investment.

The parent/guardian may not set up a formal Trust using the child’s funds. 

The Accountant of Court may allow the use of some or all of the child’s funds towards the ownership or partial ownership of a property.

The Registrar, The Register of Scotland, has confirmed to the Accountant of Court that Title can be held in the child’s name and therefore the Registered Title should reflect the child’s interest in the property. The parent or legal guardian may transact on behalf of the child, subject to the Accountant of Court’s approval.

In cases of financial hardship, the Accountant of Court may agree to the payment of a monthly allowance from the child’s funds towards their upkeep and maintenance. The parent should however bear in mind that they have a statutory duty to maintain their child and should consider whether the items or activities can be funded by themselves or from another source.

The Accountant of Court may approve 'one off' payments to help with the child’s upkeep and maintenance, e.g. school trips, holidays, Christmas.

In all cases, where a parent/guardian wishes to make application for financial assistance they should complete a “Statement of Income/Expenditure” and submit the completed form to the Accountant of Court for consideration. Our standard Statement of Income/Expenditure form can be downloaded here.

If the parent/guardian is in receipt of state support they should check with the appropriate authority  regarding how a maintenance allowance might affect their benefit.

A Direction made by the Accountant of Court or the appointment of a Judicial Factor will end upon the child reaching the age of sixteen.

In all cases the Accountant of Court will write to the child when they reach the age of sixteen to advise them of their entitlement.

If the Accountant of Court has been administering the funds, a cheque will be enclosed and if appropriate advice will be given with regards to the on-going administration and management of their investment portfolio. 

If the parent/guardian has been administering, the Accountant of Court will advise the child of their entitlement and explain how their funds are invested. They will be advised how to make the necessary arrangements to transfer the investments into their sole name.

The Accountant of Court may also write to the investment provider to remind them that the child has now reached the age of legal capacity and that they are now able to administer and manage their own financial affairs.

In all cases, the child will be asked to sign and return a Receipt and Discharge Form to the Accountant of Court.

The Accountant of Court Team will be happy to answer any enquiry about how to make an application and/or what happens afterwards.